The International Economics
Study Center

SURVEY OF INTERNATIONAL ECONOMICS COURSE

 

MODULE 12:
RATES OF RETURN AND INTEREST RATE PARITY

Textbook Reading:

Interest Rate Parity
Read all sections.


(A 2016 version of the textbook reading is available at FlatWorld Knowledge.)

Presentation Slides:

Recent Events/Analysis:

 

 

OVERVIEW

This session shows how to determine rates of return on foreign investments and how to apply those calculations to a model of exchange rate determination. Variables that affect rates of return, such as interest rates and expectations, are shown to influence the value of a floating exchange rate. The session will also provide a generalized version of the interest rate parity theory that goes beyond the rate of return formulas.

VIDEO LECTURE

This lecture was recorded in Fall 2016. It is 79 minutes long.

 

 

ANSWER KEY

Click HERE for answers to the textbook questions.

 

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